Itat/88/2023 Of Principal Commissioner Of Income Tax 2, Kolkata v. M/S Digital Commosales Llp

OD- 8 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/88/2023IA NO. GA/2/2023PRINCIPAL COMMISSIONER OF INCOME TAX-2, KOLKATA-VS-M/s. DIGITAL COMMOSALES LLP BEFORE :THE HON’BLE THE CHIEF JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE AJAY KUMAR GUPTADate : 19[th] June, 2023 Appearance :Mr. Tilak Mitra, Adv....for the appellant.Mr. J.P. Khaitan, Sr. Adv.Mr. Pratyush Jhunjhunwala, Adv.Mr. Saurabh Bagaria, Adv.Mr. S. Rudra, Adv.…for respondent The Court : This appeal filed by the revenue under Section 260A ofthe Income Tax Act, 1961m (the Act) is directed against the order dated 23[rd]June, 2021 passed in ITA No. 313/Kol/2020 for the assessment year 2012-13. The revenue has raised the following substantial questions of law forconsideration : i)WHETHER the Learned Tribunal was justified in deleting theaddition of Rs.20,00,00,000/- made by the Assessment Officer onaccount of share capital and premium in the course of assessmentin absence of identity of the creditors, genuineness andcreditworthiness of the entire transaction?addition of Rs.20,00,00,000/- made by the Assessment Officer onaccount of share capital and premium in the course of assessmentin absence of identity of the creditors, genuineness andcreditworthiness of the entire transaction? ii)WHETHER the Learned Tribunal was justified in deleting theaddition of Rs.20,00,00,000/- made by the Assessment Officerwhere no personal attendance was made by any Director of theshare allottee companies during the course of assessmentproceedings and as such identity and creditworthiness of thecreditors and genuineness of transaction could not be verified ?addition of Rs.20,00,00,000/- made by the Assessment Officerwhere no personal attendance was made by any Director of theshare allottee companies during the course of assessmentproceedings and as such identity and creditworthiness of thecreditors and genuineness of transaction could not be verified ? iii)WHETHER the Learned Tribunal has erred in considering the facts,that the assessee company discharged its onus as is envisagedunder section 68 of the Act?that the assessee company discharged its onus as is envisagedunder section 68 of the Act? We have heard Mr. Tilak Mitra, learned standing Counsel for appellantand Mr. J.P. Khaitan, learned Senior Counsel duly assisted by Mr. PratyushJhunjhunwala, learned Advocate appearing for the respondent/assessee. The question which falls for consideration is whether the addition madeby the assessing officer under Section 68 was in accordance with law andwhether the Commissioner of Income Tax, Appeals 4, Kolkata CIT(A) wasjustified in allowing the appeal by his order dated 13.12.2019. At the firstblush on perusal of the order passed by the learned Advocate we find thatthe order is a well reasoned order taking into consideration of the issue andthen rendering the findings as the order runs to 25 pages. However, on acloser examination of the order we find that the discussion of the case beginsfrom paragraph 6.5 of the order wherein the Court after noting the issue tobe decided has referred to the decision of the Co-ordinate Bench of theTribunal in the case of ITO vs.M/s. Goodpoint Commodeal Pvt. Ltd. in ITA No. The question which falls for consideration is whether the addition madeby the assessing officer under Section 68 was in accordance with law andwhether the Commissioner of Income Tax, Appeals 4, Kolkata CIT(A) wasjustified in allowing the appeal by his order dated 13.12.2019. At the firstblush on perusal of the order passed by the learned Advocate we find thatthe order is a well reasoned order taking into consideration of the issue andthen rendering the findings as the order runs to 25 pages. However, on acloser examination of the order we find that the discussion of the case beginsfrom paragraph 6.5 of the order wherein the Court after noting the issue tobe decided has referred to the decision of the Co-ordinate Bench of theTribunal in the case of ITO vs.M/s. Goodpoint Commodeal Pvt. Ltd. in ITA No. 1204/Kol/2015 for assessment year 2012-13 dated 7.6.2019. We find thatthe entire order passed in the said decision has been extracted in full and inthe last paragraph, i.e. in paragraph 6.7 the learned Tribunal said thatapplying the proposition of law laid down in the case law to the facts of thecase, the Tribunal is satisfied that the order of the CIT(A) has to be upheldand accordingly, the appeal filed by the revenue was dismissed. Prima faciewe are of the view that the order is a non speaking order. Mr. J.P. Khaitan,learned Senior Advocate, appearing for the respondent/assessee submittedthat the CIT(A) while considering the appeal took note of all the facts andalso the assessment orders of the six companies and has extracted some ofthe assessment orders and the CIT(A) has given elaborate reasons forallowing the appeal which order has been affirmed by the Tribunal. It maybe true that the order passed by the CIT(A) is an elaborate order as it couldbe seen that it runs to 102 pages. Nevertheless, the Tribunal being the lastfact finding authority in hierarchy of authorities, it is required that theTribunal as to record reasons for affirming the order passed by the CIT(A),since the facts have to be gone into to justify the findings of the CIT(A). Inthe absence of any such finding and also in the absence of any cleardiscussion as to how the proposition of law which were referred to in theorder passed by the Co-ordinate Bench of the Tribunal in the case of “M/s.Goodpoint Commodeal Pvt. Ltd.” is applicable to the facts and circumstancesof the case has to be recorded by the Tribunal so as to be qualified to be areasoned order. Thus, we are satisfied that the matter has to be reheard by the Learned Tribunal by considering the facts of the case and then coming toa conclusion as to whether the order passed by the CIT(A) is to be affirmed ornot. For such purpose we are inclined to remand the matter back to thelearned Tribunal for a fresh decision on merits in accordance with law,barring in mind the observations made above. In the light of the abovediscussion the appeal is allowed. The order passed by the learned Tribunal isset aside and the matter is remanded back to the learned Tribunal for a freshdecision on merits and in accordance with law. Consequently, the substantial questions of law are left open. (T.S. SIVAGNANAM) CHIEF JUSTICE pkd/GH. (AJAY KUMAR GUPTA, J.)